China’s European Deals Worth Quarter of a Trillion Dollars over Past Decade

A new report from Bloomberg indicates that China has participated in European investment or acquisition deals worth more than a quarter of a trillion dollars during the period from 2008 to 2018.

Bloomberg’s audit of China’s investment presence in Europe looked at 678 completed or pending deals in 30 countries since 2008, and found that Chinese state-backed or private companies participated in transactions worth over $255 billion across the region.

Europe has taken over from North America as the most popular investment destination for Chinese capital, with the region hosting approximately 45% more China-related activity in dollar terms than the United States across the same period.

Over 670 Chinese or qualifying Hong Kong-based entities have pursued investments in Europe since 2008, of which nearly100 are state-backed enterprises or investment funds.

State-affiliated entities have taken part in at least $162 billion in transactions, equal to around 63% of total deal value.

China’s investments in Europe run the gamut from key infrastructure in peripheral countries such as Greece, Cyprus and Portugal, to stakes in tech firms situated in advanced economies.

Chinese Investors have taken over approximately 360 European companies, including Irish aircraft leasing company Avolon Holdings Ltd and Italian tire maker Pirelli.

They are also key stakeholders in Europe’s critical infrastructure, acquiring partial or complete ownership of four airports, six sea ports (including the main Greek port of Piraeus), and wind farms across at least nine countries.

Germany and the UK are hotbeds for Chinese capital, with each country hosting more than 100 deals during the period from 2008 to 2018, while France, Italy and the Netherlands are also popular investment destinations. Over half of known investment deals are situated in Europe’s five biggest economies.

London in particular has proved highly popular for Chinese buyers, who have grabbed a dozen offices in its financial district. Chinese deals in the UK alone were worth around $70 billion during the decade-long period.

The report authors further point out that their figures still underestimate the actual scope of China’s acquisitions and investments in Europe, as they exclude 355 mergers, investments and joint ventures for which terms are unavailable, and could be worth as much as $13.3 billion. Greenfield developments and stock market operations worth at least $40 billion are also excluded.

According to analysts the tide Chinese investment in Europe has triggered much concern amongst Western European political leaders such as German Chancellor Angela Merkel and French President Emmanuel Macron, who have  for a joint strategy to address the influx of money.

Smaller nations such as Cyprus, Greece and Portugal are more congenial towards Chinese capital, complaining that the introduction of an EU-wide investment screen as proposed by Western Europe would impede the ability of these poorer economies to access funds.

 

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